IN THE HIGH COURT OF SOUTH AFRICA
FREE STATE DIVISION, BLOEMFONTEIN
In the matter between:
JOHANNES WESSELS N.O.
(In his capacity as trustee of the Allegaartjie Besigheidstrust
Trust No IT810/2018)
RONE ERASMUS N.O.
(In his capacity as trustee of the Allegaartjie Besigheidstrust
Trust No IT810/2018)
and
SELOSESHA DEVELOPMENT (PTY) LTD
JONA THAN ILAN TAITZ
JONATHAN WOLPE
JONATHAN WOLPE N.O.
(In his capacity as trustee of the Jonathan Wolpe Trust,
Trust No IT708/2011)
JONATHAN ILAN TAITZ N.O.
(In his capacity a,s trustee of the Jonathan Wolpe Trust,
Trust No IT708/2011)
SHAUN ZAGNOEV N.O.
(In his capacity as trustee of the Jonathan Wolpe Trust,
Trust No IT708/2011) Reportable Yes/No
Case No: 3492/2024
First Plaintiff
Second Plaintiff
First Defendant
Second Defendant
Third Defendant
Fourth Defendant
Fifth Defendant
Sixth Defendant
CORAM: Heter AJ
Heard: 29 November 2024
Delivered: 27 February 2025
ORDER
The exception is dismissed with costs on scale B.
JUDGMENT
Heter AJ
[1] The matter served before me as an exception in terms of Rule 23 of the
Uniform Rules of Court.
[2] At the offset I wish to deal with the fact that the exception filed on behalf of the
defendants does not comply with the provisions of Rule 23(1) in that, while the
defendants based their exception on the grounds of not sustaining a cause of
action, they also rely in the alternative on the Particulars of Claim being vague
and embarrassing .
[3] Defendants did not expressly in this exception indicate that plaintiffs were
granted the opportunity to amend its Particulars of Claim as required in terms
of Rule 23(1)(a).
[4] However, from the Heads of Argument of Ms Froneman, appearing on behalf
of the plaintiffs, it appears that the 'plaintiffs advised the defendants that they did not
intend to amend the pleadings and requested the defendants to enrol the matter for
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argument'. Having had the opportunity to consider the amendment of the
Particulars of Claim and did not amend their Particulars of Claim, I proceeded
hearing arguments on the merits of the exception raised.
[5] The exception by the defendants was raised against the Particulars of Claim
by the plaintiffs. Because the allegations as contained in the Particulars of
Claim are quite intricate, I will provide a brief summary of the allegations
contained in the Particulars of Claim.
[6] The plaintiffs are cited in their capacities as trustees of the Allegaartjie
Business Trust.
[7] On 21 September 2015 the Jonathan Wolpe Trust (herein later referred to as
"JWT") and T & W Developers CC (herein later referred to as "TW")
concluded a written Joint Venture Agreement ("JVA"). A copy of this JVA is
attached to the Particulars of Claim.
[8] The purpose of the JVA was to secure land for the development of a retail
centre in Selosesha, Extension 2, Thaba Nchu, as well as the development of
such a retail centre.
[9] In terms of the agreement , JWT was obliged to create a company, which the
parties would use to give effect to its commercial venture to develop the retail
centre. JWT registered Selosesha Developments (Pty) Ltd ("SD"), the first
defendant, during September 2016.
[1 O] It was further agreed that both parties to the agreement (JWT and TW) would
have a director in the yet to be formed company, SD.
[11] TW was to provide the land in exchange for a 10% shareholding in SD and in
return, receive a TW interest-bearing loan account from SD in the amount of·
R3,500,000 .00. In terms of the JVA, TW would earn interest on the loan
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account at the prime lending rate from the date of transfer of the property, the
interest of which had to be paid monthly by JWT and/or SD to TW.
[12] The share capital in SD would be 90% for JWT and 10% for TW.
[13] JWT was to contribute all the fundi_ng necessary to complete the
development. This funding was to be provided both in cash and sourced
through a bond registered in the name of SD and against the property
concerned.
[ 14] In terms of the JVA, 'all legal contracts to be concluded in connection with the project,
property, facility management and administration or in connection with sales, development
and leasing to the company shall be required to have a prior written approval of both parties'.
[15] A shareholder's agreement was not concluded.
[16] It was further agreed that both JWT and TW were entitled to appoint one
director each. Despite these provisions, and a resolution by SD dated 1 0
February 2022, Taitz, the second defendant, has according to the plaintiff
failed to re-appoint first plaintiff in his personal capacity as a director of SD.
[17] It is alleged that defendants completely disregarded their legal duties and
obligations as directors and/or trustees of the respective entities. The
defendant acted in contravention of all relevant legislation and the common
law, which actions were unlawful and illegal, ma/a fide and/or malicious,
constituting personal liability.
[18] It is alleged that TW with written permission in terms of clause 12 of the JVA,
sold and assigned its 10% shares of which 8% to Allegaartjie and 2% to the
Laubscher Family Trust ("LFT").
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[19] Clause 1.3 of the JVA provides that:
'... Any party in this agreement shall include its successors in title and personal
representative, by and against whom this agreement shall be enforceable.'
[20] Due to the transfer of shares, SD entered into four deeds of sale with
Allegaartjie and LFT respectively for the sale of four erven.
[21] In terms of the deeds of sale, Allegaartjie and LFT was to acquire
shareholding and an interest-bearing loan account in SD.
[22] TW, the plaintiffs and LFT complied with the obligations in terms of the JVA
and the respective deeds of sale by transferring the four erven to SD during
2020.
[23] The JVA as well as the respective deeds of sale provided for interest on the
loan account to be payable to Allegaartjie and LFT on a monthly basis.
[24] LFT then ceded its interest-bearing loan account in its 2% shares to
Allegaartjie in terms of the shareholding clause in terms of the provisions of
the JVA, thus entitling Allegaartjie to receive the total amount of monthly
interest payable by SD on the loan account.
[25] SD commenced with sporadic and not monthly payments as required by the
JVA on 2 September 2021. The last interest payment was allegedly made on
27 July 2022.
[26] During October 2022 first plaintiff received the following response:
'We did undertake to fund the development, but now it seems the development
envisaged is not economically feasible, and in the interest of both parties, we do not
believe that we are obliged or able to carry on funding interest on the loan account.'
[27] The defendants repudiated the terms of the JVA as well as the respective
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deeds
of sale which repudiation the plaintiffs elected to accept as per a letter dated 6
May 2024.
[28] The outstanding interest accrued, owing and payable on the plaintiffs' loan
account as on 31 March 2024 amounted to R710,458.20.
Principles relating to exceptions
[29] In Titan Asset Management (Pty) Ltd and Others v Lanzerac Estate
Investments (Pty) Ltd and Another (supra), Binns-Ward J stated inter alia
as follows in regards to the principles applicable in the adjudication of
exceptions:
'Suffice it to say that a pragmatic approach is called for, bearing in mind the purpose
of an exception; being to weed out claims that should not proceed to trial because a
cognisable claim or defence, as the case may be, has not been made out on the
pleadings, or to prevent a claim or defence being persisted with on pleadings that are
vague and embarrassing.' (emphasis added) 1
[30) 'If an exception on the ground that certain allegations are vague and embarrassing is to
succeed, then it must be shown that the defendant, at any rate for the purposes of his plea, is
substantially embarrassed by the vagueness or lack of particularity . . . The object of all
pleadings is that a succinct statement of the grounds upon which a claim is made or resisted
shall be set forth shortly and concisely; and where such statement is vague, ii is either
meaningless or capable of more than one meaning. It is embarrassing in that it cannot be
gathered from what ground is relied upon by the pleader.'2
[31] In Standard Bank v Hunkydory Investments (No 1)3, Steyn AJ stated:
1 Par. [IO].
2 Lockhat and Others v Minister of the Interior 1960 (3) SA 765 (D) at 717 C -E.
3 2010 (I) SA 627 (CPD)
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'Prejudice to a litigant faced with an embarrassing pleading lies ultimately in an
inability to prepare properly to meet an opponent's case.'4
[32] It is now settled law that the ultimate test as to whether or not an exception
should be upheld is whether the excipient is prejudiced. 5
[33] It is also now settled law that the onus is on the excipient to show both
vagueness amounting to embarrassment and embarrassment amounting to
prejudice.
[34] In the recent judgment of Smith NO and Others v Dabula Manzi Farmers
(Pty) Ltd6, Van Rhyn J stated the following:
First ground 'It is a basic principle that particulars of claim should be so phrased that a defendant
may reasonable and fairly be required to plead thereto. The purpose of pleadings is
to define the issues to enable each side to come to trial prepared to meet the case of
the other and not be taken by surprise.'7
[35] According to the defendants, the plaintiffs are not ex facie a party to the JVA.
The bases for the first ground of exception is that according to the defendants,
the plaintiffs have failed to plead any averments in compliance with clause
19.1 of the JVA and therefore the plaintiffs could not have the rights and
obligations in terms of the JV A.
[36] According to Mr Dorning, appearing on behalf of the defendants, clause 19(a)
of the JVA constitutes a pactum de non cedendo which inhibits a cession.
Where a right which is created as a non-transferable right, as in the case of
with the JVA, a cession contrary to the JVA is of no force and effect as the
4 p. 630, par. [1 0].
s Francis v Sharp 2004 (3) SA 230 (C) at 240 E-F;
Trope v South African Reserve Bank 1992 (3) SA 208 (T) at 211 B.
6 (5874/2021) [2023] ZAFSHC 389 (9 October 2023)
7 Par. [5].
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nature of the right is such that it is not transferable. Accordingly, according to
Mr Dorning, insofar as the plaintiffs place any reliance on the JVA for their
claims against the defendants, they have not pleaded sufficient allegations to
disclose a cause of action against any of the defendants.
[37] Clause 19.1 of the JVA provides as follows:
'The parties shall not cede, delegate, encumber, assign or otherwise transfer any of
their rights and obligations in terms of and/or interest in the agreement to any third
party except with the mutual consent of all the parties in writing.'
[38] In this regard, the plaintiffs allege that TW, with written permission in terms of
clause 12 of the JVA sold its shares. Clause 12 of the JVA reads as follows:
'If any party wishes to sell, transfer or otherwise dispose of any or all of their shares in
the company, then such party shall act in accordance with the provisions of the
shareholders agreement. '
[39] It is common cause that no shareholders agreement was concluded.
However, from a resolution by SD together with a number of e-mails in this
regard, it is patently clear that such consent had been granted by first
defendant who was effectively a party to the JVA through the representation
by JWT on behalf of SD during the conclusion of the JVA.
[40] This ground of exception should therefore fail.
Second ground
[41] In respect of the plaintiffs' reliance on the JVA being the framework and
agreement upon which liability as against the defendants, the defendants
contend that the plaintiffs' Particulars of Claim fails to disclose a cause of
action and/or plead sufficient averments to sustain the cause of action insofar
ass 21 of the Companies Act 71 of 2008 is concerned.
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[42] S 21 of the Companies Act provides as follows:
'Pre-incorporation contracts
(1) A person may enter into written agreement in the name of or purport to act in the
name of, or on behalf of, an entity that is contemplated to be incorporated in
terms of this Act, but does not yet exist at the time.
(2) A person who does anything contemplated in subsection (1) is jointly and
severally liable with any other such person for liabilities created as provided for in
the pre-incorporation contract while so acting, if -
(a) the contemplated entity is not subsequently incorporated; or
(b) after being incorporated, the company rejects any part of such an agreement
or action.'
[43] As already mentioned, the plaintiffs allege in the Particulars of Claim that first
and second defendants failed to re-appointment Mr Wessels as director of SD
which, according to the plaintiffs, constitutes proof that the defendants and by
implication second defendant, completely disregarded his legal duty as
director. Considering the further wording to the effect that the defendants,
again by implication the second defendant, acted in contravention of all
relevant legislation and the common law, which actions were unlawful and
illegal, ma/a fide and/or malicious, constituting personal liability, it appears
that, although not expressly stated with reference to s 21 of the Companies
Act, this to be the basis for constituting personal liability. I limit myself only to
the allegations pertaining to the second defendant whereas this basis of
exception raised by the defendants deals only with the provisions of s 21 of
the Companies Act, and for that reason only those allegations pertaining to
the second defendant may be considered.
[44] Although the allegations by the plaintiffs in this regard are indeed vague and it
is indeed doubtful to establish liability in respect of second defendant on the
facts relied upon by the plaintiffs, it cannot be said to be embarrassing in that
it cannot be gathered from it what ground is relied upon by the plaintiffs.
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[45] These are the allegations relied upon by the plaintiffs pertaining to the second
defendant alleged liability. Nothing prevents the defendants from pleading its
version. The defendants may deny the second defendant's liability on the
basis of s 21 of the Companies Act or any other basis they deem fit. This
ground of exception must therefore also fail.
Third ground
[46] According to Mr Dorning, having considered that the plaintiffs cannot place
reliance on the JVA to find liability against any of the defendants, the
remaining basis upon which there exist the possibility for the plaintiffs to
disclose a cause of action rests on the four deeds of sale, and, insofar as
second to sixth defendants are concerned, the alleged statutory claims.
[ 4 7] According to Mr Dorning, each of the deeds of sale ex facie provides:
(i) The plaintiffs or LFT as the seller;
(ii) SD as the purchaser;
(iii) None of the other defendants are parties to the deeds of sale.
[48] It is conceded by defendants that the Particulars of Claim does disclose a
cause of action against first defendant premised on the four deeds of sale.
What remains is whether a cause of action has been disclosed against the
remaining defendants because the plaintiffs allege that ' ... the defendants are
liability to meet all outstanding obligations of ST, which are due and payable to the plaintiffs'.
[49] It is correct that JWT was not a party to the deeds of sale. It is also correct
that the plaintiffs have failed to plead any averments upon which the liability of
the JWT can be found premised on the four deeds of sale.
[50] However, as far as this ground is concerned, I again wish to refer to the
relevant portion of plaintiffs' Particulars of Claim, and in this regard the full
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version thereof which reads as follows:
' ... The first defendant and second defendants failed to reappoint Mr Wessels as a
director of SD ... This is proof that the defendants completely disregarded their legal
duties and obligations as directors and/or trustees of the respective entities. The
defendants acted in contravention of all relevant legislation and the common law,
which actions were unlawful and illegal, ma/a fide and/or malicious, constituting
personal liability.'
[51] Mr Dorning then further pointed out that ex facie the Particulars of Claim, the
second defendant is cited personally in his capacity as the sole director of SD
and in terms of s 76 and 218 of the Companies Act 71 of 2008. The plaintiffs
do not state which subsections it refers to in either s 78 or 218 of the
Companies Act.
[52] In his Heads of Argument, Mr Dorning further dealt with the provisions of s
218(2) of the Companies Act as well as s 76 thereof. He also relied upon
certain authorities relating to these sections of the Companies Act. These are
however aspects which can be dealt with and raise by the defendants in their
plea.
[53] I therefore find that, for the same reasons in respect of the second ground of
exception, this ground of exception should also fail.
[54] Whereas the defendants were unsuccessful in their exception in totality, the
plaintiffs are entitled to be awarded costs in their favour.
herefore, I make the following order:
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Order
The exception is dismissed with costs on scale B.
Appearances:
On behalf of plaintiffs:
Instructed by:
On behalf of defendants:
Instructed by: F HEFER, AJ
Adv M F roneman
Willie J Botha Incorporated
Bloemfontein
Mr J Dorning
Mullers Attorneys
Bedfortview
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